The NBA is “considering expanding team ownership rules to allow additional private equity investment funds to buy minority stakes in teams,” according to Lombardo & Smith of SPORTS BUSINESS JOURNAL. Most leagues have “long opposed institutional team ownership, but the meteoric rise in team values over the past decade has greatly limited the pool of potential buyers.” No timetable has been established, but the matter “is being addressed by the league’s finance committee and will be revisited” by the BOG in the future. A source said that the BOG is “considering establishing guidelines that would allow additional funds to make minority investments in teams, but nothing has been approved.” Another benefit of private equity investment in NBA teams is the “potential consolidation of existing limited partners.” Many teams have a “number of minority partners, some of whom own only a tiny fraction of the team, and expanded private equity ownership could offer those limited partners a way out, cleaning up team cap tables while saving general partners from having to come up with the money" (SPORTS BUSINESS JOURNAL, 1/18 issue).
